PROMISSSORY NOTE DEAL TO BOOST NTMA - Initial reaction to the restructuring of the Anglo legacy debt burden now borne by the state suggests that investors are viewing it as a watershed. The yield on 10 year government bonds, which gives us an indication of the interest rate investors would demand if the Government were to borrow money over that term, is typically the benchmark we rely on to assess confidence in nation-states and their financial stability. Ireland does not have 10 year bonds because it has been in a bailout programme since 2010, but the yield on the Government bond due in 2020 fell as low as 3.95% yesterday evening. This was back to 2007 pre-crisis levels. This morning it moved back up slightly again to 4.1%, but this is in contrast to Italy's 10 year bond yield of 4.6% and Spain's 5.4% level.

Owen Callan, senior dealer with Dankse Markets - which is a primary dealer in Irish government bonds - says he expects to see strong positive comments from the international rating agencies after yesterday's deal. But he cautions that the agencies are like big tankers - they turn direction at a very slow pace and tend to stay pointed in that direction for some time also. He also points out that their ratings lag real time events. They were slow on the way down during the crisis and will be slow on the way back up and are generally the last people to recognise a country's economic achievements.

Mr Callan notes that Moody's - which has Ireland at junk status - has not changed its mind about the country's rating, while it also keeps us on negative outlook. But he notes a ''softening'' in their language in recent weeks and they said that yesterday's deal was credit positive. The senior dealer says that the promissory note deal has to be seen as a positive and it will help to put National Treasury Management Agency in a more flexible position on the international markets. He says the NTMA will sell a ten year bond in the first half of this year, adding that the sale may come as early as this month as the agency is opportunistic and will return to the markets when there is a suitable window.


MORNING BRIEFS - Apple is facing legal action by one of its shareholders, the hedge fund manager David Einhorn, who is putting pressure on the company to start divvying out some of its $137 billion cash to investors. Apple, like many successful US companies, holds a lot of its cash outside the US and would face a hefty tax bill were it to repatriate the money.

*** Retail sales in China ahead of the Lunar New Year holiday next week expected to be up 15% compared to the holiday period last year. Chinese radio and television stations have been instructed to pull advertisements encouraging people to give expensive gifts and buy luxury items such as jewellery and high-end watches. That news hit share prices of high end brands on stock markets yesterday. Fashion label Burberry fell 4.5%, while watchmaker Swatch was down 1.2%.